The ministry said it cancelled the operating licence of Layang-Layang Island Resort Sdn Bhd on Jan 6, in line with Section 8 of the Tourism Industry Act 1992.

However, it did not disclose the specific reason for revoking the licence.

“The tourism, arts and culture ministry views seriously any breaking of the law by tourism enterprises. This is to protect the welfare and interests of the people,” the ministry’s secretary-general Roslan Abdul Rahman said in a statement.

There were previously claims that the company had failed to return deposits to more than 100 tourists who booked scuba diving packages with the resort since 2020.

The resort was said to have been closed since 2022 due to the impact of the Covid-19 pandemic and the ensuing lockdowns.

In November, Daily Express reported that three tourism agencies in Sabah were facing significant financial losses due to the closure of the resort.

Dreamy Island Holidays, Kudat Scuba Resorts, and The Kekung had collectively paid over RM272,000 for bookings made between 2020 and 2022, before the pandemic struck.

However, the resort refused to issue any refunds, citing its “no-refund policy”.

The tourism agents contacted the tourism, arts and culture ministry and filed police reports, but the situation reportedly remained unresolved.